Press Release: Balance tips in favour of Prime Central London
Tue 05 May 2015
- Homes in Prime Central London saw the biggest rise in value during Q1 2015, as the centre starts to outperform Outer Prime parts of the capital for first time since June 2013
- Buyers now pay a 34% price premium to live in Prime Central areas like Kensington & Chelsea
Property growth in Prime Central London is starting to outpace Outer suburban areas, according to estate agent Marsh & Parsons latest London Property Monitor for Q1 2015.
Historically, property prices in the most affluent Prime Central areas of London had been accelerating away from values in the rest of the capital, due to consistently higher demand from overseas and domestic buyers keen to live in the most famous London locations. However, over the past two years, areas such as Brook Green and Balham have experienced some of the steepest price rises across the capital.
But this looks to have been a short-term phenomenon, as we enter a new phase in the cycle. While Outer Prime house prices have fallen 1.8% in the past three months, there has been a resurgence in price growth in prestigious Prime Central London with values up 0.3% throughout the last quarter.
This is the first time in over a year that price rises in exclusive central areas like Pimlico and Kensington have overtaken the growth in more affordable areas like Balham, and this is a trend that Marsh & Parsons expect to continue throughout this year.
As a result of this turnaround, the price premium paid for Prime London property has risen for the first time in fifteen months, and is now back in line with last year. Buyers can currently expect to pay a 34% premium to live in central locations.
Peter Rollings, CEO of Marsh & Parsons, comments: The Outer Prime dark horses of Balham and Brook Green have been putting on the most astonishing performance recently, with an eye-catching spurt of growth in 2014. But in the long-run, the traditional property stalwarts of Kensington, Chelsea and Holland Park are proving they have the stamina to withstand a wider market slowdown.
While the wind slackens in the sails of other parts of the London housing market, the enduring appeal of the most desirable Prime Central postcodes has ensured growth ticks on. We believe this trend is set to continue in the next twelve months, with Prime Central areas outperforming Outer Prime areas for the first time in more than two years.
Prime London Property Price Movements
|Average Value||Quarterly Change||Annual Change|
|All Prime London||1,553,892||-0.6%||1.7%|
|Prime Central London||2,080,742||0.3%||1.4%|
|Outer Prime London||1,158,754||-1.8%||2.1%|
As growth at the higher-end of the market continues momentum, the proportion of million-pound properties in Prime Central London has risen 3% in the past quarter, to stand at 67% of all homes.
With the average house price currently standing at 2,080,742 in these enclaves, 38% of properties in Prime Central London are now worth 2million or more highlighting the implications of any Labour or Liberal Democrat Mansion Tax on the housing market in these parts of capital. In addition, more than one fifth (22%) of Prime Central London properties surpass the 3m threshold.
Investors and overseas buyers
Nearly half (49%) of all Prime Central purchases over the past three months were made by investors the highest proportion on record, up from 30% a year ago.
This corresponds with an uptick in foreign buyers, with the proportion of purchases made by overseas and foreign nationality buyers reaching 30% over the past three months, up from 21% a year ago.
The Lettings Market
Popular with corporate lettings and renters from overseas, it is also average rents in Prime Central London that have increased at the fastest quarterly rate, rising 2.6% in the first quarter of 2015 compared to just 1.3% rent growth in Outer Prime locations over the same period. This takes the cost of renting in Prime Central parts of the capital to 712 per week on average.
Ahead of the General Election, and in the midst of speculation about a Mansion Tax on top-end property, many potential buyers are delaying purchase decisions until a government is decided, intensifying demand for rented accommodation at the highest tiers of the market. It is four-bedroom family homes in these exclusive central locations which have witnessed the strongest annual rent growth, with typical rents climbing 9% in the past year.
Peter Rollings concludes: Its not just in terms of price growth where Prime Central London is asserting its dominance over the rest of the city. Demand for high-end homes to let has been partly driven by the current political uncertainty. Those hesitating to put down firm roots until questions of Mansion Tax and property regulation are clarified are relying on the private rented sector in the short-term, especially those families relocating from overseas.
For further detailed analysis on Prime London lettings, million pound homes, investors and UK buyers please see Marsh & Parsons accompanying London Property Monitor for Q4 2014.
Peter Rollings, CEO at Marsh & Parsons, is available for interview to discuss the findings. Please contact Emily Barnes on 020 7247 1403 to arrange a media interview.
The Prime Market Monitor uses a repeat valuation methodology that tracks values in a robust and representative mix-adjusted basket of properties across Prime London in the main areas in which Marsh & Parsons operates. Prime Central London comprises representative baskets of properties covering Chelsea, Kensington, Notting Hill, Holland Park, Earls Court and Pimlico. Outer Prime London comprises areas such as Clapham, Balham, Battersea, Barnes, Little Venice, Fulham and Brook Green. Prime London describes all these areas combined including Prime Central London and Outer Prime London.
Supply and demand statistics are based on an audit of Marsh & Parsons registrations and instructions during the quarter. Buyer profile information is taken from Marsh & Parsons quarterly MI data.
For further information please contact: Instinctif Partners - Emily Barnes / Barney McCarthy: 0207 427 1403 / 0207 427 1405
Marsh & Parsons
Marsh & Parsons, a multi-award winning estate agent, has been part of the London property scene since 1856. With 24 offices situated in prime positions across central, west and south west London, they have an intimate and extensive knowledge of the area. Marsh & Parsons services include residential sales and lettings, property management, new homes, developments & investments, professional surveying and corporate & relocation services.
Marsh & Parsons was acquired by LSL Property Services plc in November 2011, but continues to operate as a separate business, retaining its current management team.
A business that is built on energy, agility, professionalism and knowledge, Marsh & Parsons business aim is to be the agent who not only understands the local area around their offices better than any other agent, but is also at the heart of the community. They believe that Local know-how will achieve better results and make the difference for their clients.